IASbaba’s Daily Current Affairs – 19th December, 2015

NATIONAL

TOPIC:

General Studies 1: Role of women and women’s organization

General Studies 2: Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes; mechanisms, laws, institutions and Bodies constituted for the protection and betterment of these vulnerable sections.

Women Issues: India’s Daughters- Ashamed and Angry

Reuters Foundation: India is the fourth worst country in the world for women

Let the Numbers do the talking—

National Crime Records Bureau:2,096 rape cases in the city of Delhi in 2014

2014: Out of the 11,000 FIRs filed in cases of crimes against women, Delhi Police has filed chargesheets in only 3,500 till now

Himmat App: Out of the 4,000 cases received, hardly four saw FIRs being filed

RTI application: Revealed that of the 1.5 lakh complaints received against Delhi Police officials in the past six years, FIRs were registered in only 95 cases

Plaguing Issues

96.7 per cent of rape cases are rapes by acquaintances:

Limits the role of the Police officials in preventing such crimes

Number of Policemen:

Single investigating officer is made to handle more than 250 cases

More than 40 per cent of the total strength of Delhi Police is engaged in VIP protocol duties, training of staff, petty civil issues, etc.

Investigation:

Marred with lack of sufficient manpower

Forensic delays

of laboratory in the Rape capital of India: ONE

Fast-track transforms into slow-track:

Suffer from pendency’s amounting to over three years

Long pendency because of a non-existing special courts for child rape or child sexual assault

Psychological Effect: Encourage a woman to report rape or punish her more by making her wait?

Delhi’s fractured mandate:

Prevents the Delhi government from ensuring coordinated decision-making and demanding accountability from Delhi Police

Article 239AA of the Constitution: The democratically elected government of Delhi does not have control over Delhi Police, a subject that is otherwise on the state list

Problems:

Frequent instances of poor investigation,

Non-filing of FIRs

Insensitivity of personnel cannot be addressed in a timely manner

To facilitate quick decision-making and cooperation between the various agencies responsible for women’s safety and security: Establishment of a larger coordination body (major stakeholder’s involvement)

Public Transportation Neglected: Union ministry of women and child development (WCD), the nodal agency for utilisation of Nirbhaya funds, rejected a proposal to install CCTV cameras in DTC buses because it was not “gender sensitive”

Sidelined Gender Perspective—

Beijing Declaration + Platform for Action:

Mainstream the gender perspective

Create institutions that are sensitive to violence against women

Need for Systemic Reforms:

Facilitate dialogue, instead of opposition: Initiate sustained political will and a committed polity working in concert with the bureaucracy and civil society

The highest population — adjusted incidence of rape is in north-east states where women are reputed to enjoy relatively high levels of personal freedoms and status:

Mizoram ranks highest, with a rape rate of 20.81

Followed by Tripura with 12.77, and

Meghalaya with 12.46 and

Assam with 11.34

Urgent Need to be armed by Technology:

Closed-circuit camera surveillance

Establishment of Forensics Laboratories across the country

Research & Development in the field of Forensics

Data Science to be employed- To make intelligent public policy choices based on reality

Reforms in management of cases related to crime against women:

Rape Crisis Cell should be set up:

Be immediately notified when an FIR in relation to sexual assault is made

Must provide legal assistance to the victim.

Complains:

All police stations should have CCTVs at the entrance and in the questioning room.

A complainant should be able to file FIRs online.

Police officers:

Be duty bound to assist victims of sexual offences irrespective of the crime’s jurisdiction

Be trained to deal with sexual offences appropriately

Number of police personnel should be increased

Community policing should be developed by providing training to volunteers

Medical examination of a rape victim:

Discontinuation of the two-finger test (conducted to determine the laxity of the vaginal muscles)

Jonathan Kay has noted that sexual violence isn’t driven by any one thing

“Is rape sex” he asks?

“Yes.

“Is it violence?

Yes.

Therefore, Rape can be any twisted combination of those things, which is why the crime is so tragically common, and so difficult to eradicate.”

Connecting the Dots:

Do you agree with the ban put on the movie ‘India’s Daughter’? Substantiate your views with proper arguments.

Explore the ethical issues related to marital rape and discuss the legal mechanism present with the woman to seek justice

Note: The statistical figures have been obtained from verified sources. If any discrepancy found, do comment with the correct data in the comment box below.

ECONOMICS

TOPIC:

General Studies 3:

Indian Economy and issues relating to mobilization of resources, growth, development

General Studies 2:

Government policies and interventions for development in various sectors and issues arising out of their design and implementation; Important aspects of governance, transparency and accountability

Non-performing assets and recent steps to clean them up

The governor of the Reserve Bank of India (RBI), Raghuram Rajan, said earlier this month that he expected banks to clean up their books in terms of stressed assets by the end of the next financial year – that is, by March 2017. Stressed assets – which include both bad loans officially classified as non-performing assets (NPAs) and those that are undergoing corporate debt restructuring (CDR) – accounted for a worrying 11.1 per cent of total advances as of last quarter.

What does CDR mean?

The reorganization of a company’s outstanding obligations, often achieved by reducing the burden of the debts on the company by decreasing the rates paid and increasing the time the company has to pay the obligation back. This allows a company to increase its ability to meet the obligations. Also, some of the debt may be forgiven by creditors in exchange for an equity position in the company.

What is the Need for CDR?

The need for a corporate debt restructuring often arises when a company is going through financial hardship and is having difficulty in meeting its obligations. If the troubles are enough to pose a high risk of the company going bankrupt, it can negotiate with its creditors to reduce these burdens and increase its chances of avoiding bankruptcy.

What is NPA?

A classification used by financial institutions that refer to loans that are in jeopardy of default. Once the borrower has failed to make interest or principal payments for 90 days the loan is considered to be a non-performing asset.

Bank’s assets are the loans and advances given to customers. If customers do not pay either interest or part of principal or both, the loan turns into bad loan.

But in terms of Agriculture / Farm Loans; the NPA is defined as under:

Short duration crop loan : Loan is termed as NPA in this scenario if the loan either in terms of installment or interest is not paid for 2 crop seasons, it would be termed as NPA. Example: Agri loans such as paddy, jowar, Bajra etc.

For Long Duration Crops, the above would be 1 Crop season from the due date.

Reasons for occurrence of NPA:

Default by borrowers

Bad lending practices

Economic condition of a region effected by natural calamities

Deficiencies risk management- Speculation is one of the major reason behind default. Sometimes banks provide loans to borrowers with bad credit history. There is high probability of default in these cases.

Diversion of funds – Many times borrowers divert the borrowed funds to purposes other than mentioned in loan documents.

A banking crisis (as happened in South Asia and Japan)

Implication of NPA:

Depositors do not get rightful returns and many times may lose uninsured deposits.

Bad loans imply redirecting of funds from good projects to bad ones. Hence, the economy suffers due to loss of good projects and failure of bad investments.

When bank do not get loan repayment or interest payments, liquidity problems may ensue.

The most important implication of the NPA is that a bank can neither credit the income nor debit to loss, unless either recovered or identified as loss. If a borrower has multiple accounts, all accounts would be considered NPA if one account becomes NPA.

The principle of customer care is neglected and customer torture begins. This brings the borrower in a helpless situation and at the mercy of the Bank.

Measures taken to reduce NPA:

NPA and SARFAESI Act:

The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act has provisions for the banks to take legal recourse to recover their dues.

When a borrower makes any default in repayment and his account is classified as NPA; the secured creditor has to issue notice to the borrower giving him 60 days to pay his dues.

If the dues are not paid, the bank can take possession of the assets and can also give it on lease or sell it; as per provisions of the SAFAESI Act.

NPAs and Asset Reconstruction Company:

If a bad loan remains NPA for at least two years, the bank can also resale the same to the Asset Reconstruction Companies such as Asset Reconstruction Company (India) (ARCIL).

These sales are only on Cash Basis and the purchasing bank/ company would have to keep the accounts for at least 15 months before it sells to other bank.

They purchase such loans on low amounts and try to recover as much as possible from the defaulters. Their revenue is difference between the purchased amount and recovered amount.

Steps taken by RBI:

Recently RBI, as regulator, has taken several steps to help banks deal with the stressed-assets problem-

Strategic debt restructuring, in which the debt is turned into equity. However, this can be only be an interim effort, given that banks do not have the managerial competence or resources to effectively become private equity firms.

“5/25” system, by which loans to infrastructure companies are extended in tenure. However, this has to be closely watched. Earlier, CDR assets did not have the onerous provisioning requirements associated with NPAs, and so there was concern that banks were playing around with the classifications to make their books look better. The RBI has closed that loophole.

Way Forward:

It is to be noted that, the problem of bad loans is particularly acute in public-sector banks (PSBs). So it is the responsibility of the primary shareholder i.e., the government to take necessary steps regarding this issue. The RBI cannot be left doing all the heavy lifting. The problem is particularly acute in mid-sized PSBs like Indian Overseas Bank or UCO Bank. The former reported NPAs at 11 % in the quarter ended September (2015).

It has also been reported that the government intends to use part of the proposed National Infrastructure Investment Fund (NIIF) to bid for stressed assets that it can then work to turn around, while simultaneously cleaning up bank books.

Connecting the Dots:

How does NPA affect Indian economy? How can Government, Banks and RBI work in sync in reducing NPA and reduce its effects on economy?

Does loan (NPA) waiving done by govt given to farmers during agri distress help them de-stress? Comment.

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